Finance Minister refuses to back lowest bid for Czech eco-tender

None of the bids for the massive eco-tender to clean up the country's most polluted sties will be recommended by the Finance Ministry

The site of a future forest — in a couple generations, maybe. Under Geosan Group, the Ostramo lagoon in Northern Moravia remains a toxic mess. | na serveru Lidovky.cz | aktuální zprávy The site of a future forest — in a couple generations, maybe. Under Geosan Group, the Ostramo lagoon in Northern Moravia remains a toxic mess. | foto: © ČTKČeská pozice
The site of a future forest — in a couple generations, maybe. Under Geosan Group, the Ostramo lagoon in Northern Moravia remains a toxic mess.

Czech Finance Minister Miroslav Kalousek (TOP 09) announced on Wednesday that he would not recommend that the lowest bidder in the country’s biggest environmental clean-up tender, the so-called eco-tender, be awarded the contract.

“Pricewise, although it is the lowest offer, it is not according to my opinion so convincing that I could recommend that the government accept this offer,” Kalousek said in a statement. “The government can, of course, come up with another opinion.”

Marius Pedersen Engineering had submitted the lowest bid for cleaning up around 600 of the country’s worst ecological problems, with its offer to do the work for Kč 56.8 billion. The offers from rival Geosan Group came in at Kč 57. 8 billion, and Environmental Services (owned by the J&T Group) at Kč 65.5 billion. Three companies made it to the second round of the tender from the initial six offers that were made.

A Finance Ministry spokesman explained the terse statement from Kalousek as meaning that the ministry would make no recommendation about a winner of the eco-tender, and the issue would return to the government for further discussion.

‘Pricewise, although it is the lowest offer, it is not according to my opinion so convincing that I could recommend that the government accept this offer.’

The outcome of the eco-tender has been one of the most contentious and fiercely fought over battles with the fragile center-right Czech coalition. Kalousek has been one of the main backers from the start of the idea of tasking one company to clean-up the country’s worst ecological problems. But he has faced solid opposition to the idea, in particular from Prime Minister Petr Nečas (Civic Democrat, ODS).

Nečas already called for no winner of the eco-tender to be announced, a way of shelving the whole process without running the risk that one of the disappointed bidders would launch arbitration proceedings against the state for one reason or another. And the Czech Prime Minister said on Wednesday that this would be the path that the government will follow.

But there are suspicions that the eco-tender could be repackaged and make a return under a different guise, probably with separate tenders for smaller parts of the total package. Nečas has also in the past spoken up in favor of this option.

Disappointing results

Some environmental and anti-corruption groups were among the biggest critics of the originally framed tender, pointing out that the original idea of attracting some of Europe’s biggest clean-up companies to take part in the tender by holding a large tender had simply not worked out.

Few final offers came through, and many of the companies lacked specific experience, increasing the risk that they would have to bring in experts or the bidding companies would be tempted to parcel out work secretly between them.

The Czech branch of anti-corruption watchdog Transparency International warned that the way the contract had been drafted also meant there was a high likelihood that the contracted work would not be carried out properly — and that the government would be short-changed.